This article first appeared in The Edge Financial Daily on March 14, 2018
KUALA LUMPUR: An opposition lawmaker has dismissed claims that Selangor’s water woes were caused by low reserves, and instead pointed to the federal government’s lack of regulatory oversight of the only water services firm not taken over by the state government.
Charles Santiago (DAP-Klang) said in view of Syarikat Pengeluar Air Sungai Selangor Holdings Bhd’s (Splash) status as a private company, the National Water Services Commission (Span) is deemed responsible under the Water Services Commission Act 2006 to monitor the former’s services’ quality.
“Splash is [still] a privatised outfit. The Selangor government cannot simply go [into its premises to conduct checks]. The only one who can do that is Span, the regulator for water services in the country,” Santiago told reporters in the Parliament building yesterday.
“Why is Span not playing its role as a regulator to ensure the various outfits are following the necessary requirements? Span needs to ensure that Splash gets its act together and gets all its treatment plants maintained, organised and working efficiently,” he added.
Over 500,000 households in Selangor and Kuala Lumpur were affected by water disruption for several days beginning last Tuesday, due to maintenance and repair works at phase three of the Selangor water treatment plant owned by Splash.
Santiago also responded to Energy, Green Technology and Water Ministry secretary-general Datuk Seri Zaini Ujang’s comment that the water crisis in Selangor will prevail if the state government does not finalise its acquisition of Splash by July.
“This is highly misleading,” said Santiago. The Selangor government, he said, has made efforts to reduce non-revenue water from pipe leakages and opened two new treatment plants, including the Semenyih 2 water treatment plant which will have a full capacity of 100 million litres per day to Selangor’s total supply.
“The Selangor government has spent RM374 million to replace 423km of old pipes to reduce non-revenue water,” said Santiago. This successfully reduced non-revenue water as a percentage of total supply to 30.1% in 2017 from 32.6% in 2015, he added.
Santiago asked why the federal government, via Pengurusan Aset Air Bhd (PAAB), is only willing to finance 60% of the overall cost for Selangor to take over Splash.
PAAB had previously provided the full loan for Selangor’s takeover of Puncak Niaga Holdings Bhd, Konsortium Abbas Sdn Bhd and Syarikat Bekalan Air Selangor Sdn Bhd.
Splash is the last of four concessionaires that Selangor needs to take over under the state’s water rationalisation exercise. Previous reports have said the company, whose concession ends in 2029, has a third-party valuation of between RM2.8 billion and RM3.2 billion.
The federal and Selangor governments have accused each other of purposely delaying Splash’s restructuring — Selangor was urged to name its price for the deal, but it hesitated after Putrajaya refused to disclose its independent valuation of Splash’s assets.
Meanwhile, Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili has reiterated that the federal government can take over from Selangor the restructuring of Splash by invoking Section 114 of the National Water Services Industry Act.
However, the clause can only be activated for national security, he said in the Dewan Rakyat after Tan Sri Khalid Ibrahim (Independent-Bandar Tun Razak) brought up the matter.
“I want to avoid that. I hope the process can be resolved on a ‘willing buyer, willing seller’ basis,” Ongkili added.